Long-Term Debt

Your long-term debt is the sum of principle amounts of all your bank loans, corporate bonds and similar debt instruments that are to come due in more than one year. Long-term debt is always taken to finance a certain corporate project. Investment project. Therefore, your loan (or your bond issue) is an investment project itself. And therefore must be treated like one.

You need to analyze this project to make sure that it makes both financial and economic sense (i.e., that its NPV, IRR and other KPI are acceptable). Not only to your own financial people, but to your bankers as well.

To prove that, you will need to build a solid financial model for this project supported by a no less solid operational plan with comprehensive comments and explanations (a business plan) and all relevant corporate information. Again, your bankers will require it.

To make your project a success, you will need a competent and experienced project manager. And good working relationships with your bankers.